castlepeak

Types of Offerings:

Rule 506(c) of Regulation D (Title II of the JOBS Act).
Section 201(a) of the JOBS Act requires the SEC to eliminate the prohibition on using general solicitation under Rule 506 where all purchasers of the securities are accredited investors and the issuer takes reasonable steps to verify that the purchasers are accredited investors. To implement Section 201(a), the SEC adopted paragraph (c) of Rule 506. Under Rule 506(c), issuers can offer securities through means of general solicitation, provided that:
– All purchasers in the offering are accredited investors,
– The issuer takes reasonable steps to verify their accredited investor status, and
– Certain other conditions in Regulation D are satisfied.

Private Securities.
Private equity is money invested in firms which have not ‘gone public’ and therefore are not listed on any stock exchange such as “Over the Counter”, “Pink Slips”, NASDAQ or the NYSE. Private equity is illiquid because sellers of private stocks (called private securities) must first locate willing buyers. Investors in private equity are generally compensated when: (1) the firm goes public, (2) it is sold or merges with another firm, or (3) it is recapitalized. Before deciding to seek investors, know the type of investor needed and then research the individuals or investment groups to find those interested in the industry or business. Then include their requirements in opportunity presentation. In general, equity investors require a much more detailed business plan than a plan designed for debt. Depending on several factors, the Securities Exchange Commission (SEC) may require documentation, circulars, disclosures, and other forms and documents such as a Private Placement Memorandum (PPM).

Private Equity.
Private equity is equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.

The size of the private equity market has grown steadily since the 1970s. The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.
Private equity firms will sometimes pool funds together to take very large public companies private. Many private equity firms conduct what are known as leveraged buyouts (LBOs), where large amounts of debt are issued to fund a large purchase. Private equity firms will then try to improve the financial results and prospects of the company in the hope of reselling the company to another firm or cashing out via an IPO.

Private Equity through Accredited investors.
“Accredited investor” is a term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. In order for an individual to qualify as an accredited investor, he or she must accomplish at least one of the following: (1) Earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to maintain the same level of income; (2) Have a net worth exceeding $1 million, either individually or jointly with a spouse; (3) Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.

EB-5 (Employer-Based Financing).
The EB-5 visa for Immigrant Investors is a United States visa created by the Immigration Act of 1990. This visa provides a method of obtaining a green card for foreign nationals who invest money in the United States. To obtain the visa, individuals must invest at least $1 million, creating at least 10 jobs. By investing in certain qualified investments or regional centers with high unemployment rates, the required investment amount is $500,000. The Immigrant Investor Pilot Program was created by Section 610 of Public Law 102-395 on October 6, 1992. This was in accordance to a Congressional mandate aimed at stimulating economic activity and job growth, while allowing eligible aliens the opportunity to become lawful permanent residents. This “Pilot Program” required only $500,000 of investment in exchange for permanent resident status. The investment could only be received by an economic unit defined as a Regional Center.
Castle Peak Finance is a Funding intermediary Portal.

As of January 29, 2016, all funding portals must become members of a national securities association that is registered under Section 15A of the Exchange Act, in addition to registering with the SEC. Today, FINRA is the only national securities association in existence that is registered under Section 15A of the Exchange Act.

Funding Portals:
The Jumpstart Our Business Startups (JOBS) Act, enacted in 2012, amended the federal securities laws. Among other things, Title III of the JOBS Act contains key provisions relating to securities offered or sold through “crowdfunding.” Crowdfunding generally refers to the use of the Internet by small businesses to raise capital through limited investments from a large number of investors.
The JOBS Act directed the SEC to make rules to implement the Act’s crowdfunding provisions and requires FINRA to adopt rules written specifically for “funding portals,” a new kind of intermediary that would perform crowdfunding on behalf of issuers. Under the JOBS Act, funding portals must register with the SEC and must become members of a registered national securities association. FINRA is the only registered national securities association. On October 30, 2015, the SEC adopted Regulation Crowdfunding, which takes effect on May 16, 2016; however, the registration provisions under Regulation Crowdfunding, and the SEC’s Form Funding Portal, become effective on January 29, 2016.
FINRA has proposed rules and forms for funding portals. Once the SEC approves FINRA’s Funding Portal Rules and related forms, FINRA will issue a Regulatory Notice announcing the rules and providing information for prospective funding portal applicants. FINRA cannot accept applications for funding portal membership prior to that time.